A few days ago I called American Express because I wanted them to send us a new Bluebird card, since we hadn’t been able to find the prepaid card we used in Europe.

It turns out someone else used a fraudulent card with our number at an ATM last month, twice, each time withdrawing 50 euros.

We’d used the card since getting back, so we know it hadn’t been left behind. The thief had not only the card number but the PIN, so we suspect a skimmer was used to capture the information while we were abroad and the bad guys only recently decided to use it.

I’m delighted to say that, after a few false starts, I finally found an Amex employee who knew what she was doing, and the purloined amount was restored to a freshly-issued card.

Today, I got a letter that one of our credit card accounts had been frozen because of suspicious activity. It turns out someone impersonating me had called in to change our address to one in Winnetka, a nearby neighborhood in Los Angeles. Fortunately, Capital One froze the account before she could misuse it. We’ll have to be without a card for a few days while a new one is sent to us, but that’s the extent of our inconvenience.

These incidents underscored for me why it’s so much better to use credit cards (and the right prepaid card) in a world full of identity theft. If these thieves had gotten hold of my debit card, they could have drained our bank account and we’d be waiting to get the money back while transactions bounced right and left. That wait could be protracted if your financial institution questions whether fraud really occurred. With credit cards, you aren’t required to pay the disputed amount until the issuer completes its investigation.

Our recent brushes with fraud also underscore how important it is that Americans get the chip-and-PIN technology used in Europe and much of the rest of the world. Credit card issuers and retailers are in the process of transitioning slowly to this much more secure standard, starting with cards that have both a computer chip and the old-fashioned magnetic stripe. But the sooner we get to cards that must be used with a PIN for purchases, the better.

Some issuers publicly worry that we Americans will have a hard adapting to the new technology, which is absurd. It’s no harder to use a chip-and-PIN machine at a checkout register than it is to use an ATM. You stick your card in the little slot at the bottom of the checkout terminal, punch in your four-digit number and you’re done. And you’re also done with the vast majority of account takeover fraud.

Finally, there’s a prepaid card that may deserve a place in your wallet.

The American Express Serve card eliminates, or at least makes it easy to avoid, most of the niggling fees that make typical prepaid cards a bad deal:

Users will be able to load the card with cash for free at 14,000 CVS and 7-Eleven stores, according to Stefan Happ, Amex’s senior vice president for U.S. payment systems. (The usual procedure involves a reload fee of $3 to $4, and it’s a hassle: you have to first buy a reload card at a store, then call a toll-free number or go online to add the money to your account.)

ATM withdrawals are free at 22,000 MoneyPass network machines. The fee for out-of-network withdrawals is $2. That compares favorably to the $2.83 to $2.88 the average prepaid card charges, according to NerdWallet.

There is a $1 monthly fee that can be waived if you use direct deposit (have paychecks or government checks loaded directly onto the card). The fee is also waived if you load at least $500 that month.

Getting a card is free through the end of the year; after that, buying one will cost $2.95.

The card has a bill pay function and will have mobile check capture (where you can take pictures of checks to deposit them) later this year.

And get this…the card even has a savings account, called Reserve. You can set up one-time or recurring transfers that can help you save up for a purchase or get started on that all-important emergency fund.

American Express has a similar product called Bluebird, developed with WalMart, which provides free cash reloads at its stores. Not every community has a WalMart, however (shocking, I know)—New York City being one example of a WalMart-free zone. Bluebird has been singled out, by NerdWallet and others, as one of the best prepaid cards; Serve makes a good thing even better.

This is the first card I’ve seen that could actually be a viable alternative to a real checking account. That’s the audience Amex is targeting, of course: the tens of millions of Americans who are “unbanked” or “underbanked.” Many either can’t get an account or have given up on traditional banks because of all the fees. But because so many cards have hidden or less obvious fees—reload fees charged by third parties, or ATM surcharges—they often wind up paying more than they might at a consumer-friendly

Normally I’d dismiss that as PR happy talk. This card, though, delivers on the premise.

It’s also a decent alternative for delivering allowances to teenagers. Happ has set up two subaccounts for his daughters (who are over 13, the minimum age for such subaccounts), and delivers their monthly allowance to them via Serve cards.

The one bummer—it’s an American Express product, so it’s not accepted everywhere that Visa and MasterCard are. I haven’t experienced that as a huge problem; most stores I use accept Amex, and typically the only time I have to pull out an alternative I’m at a smaller independent store or a doctor’s office. But it’s something to keep in mind.

Dear Liz: I have been granted a Chapter 7 bankruptcy discharge of all my debts. I’m now debt free and plan to stay that way. I’ve been saving like crazy and have enough to afford a cross-country driving trip to attend my son’s wedding. I’d like your advice on using prepaid debit cards to cover expenses such as fuel, food and lodging. My plan is to load each of three cards with an amount of money to cover each category of expense, based on my best research estimates, as a means of controlling how much I spend. If you feel this is a good plan, which would be the best brand of card to use?

Answer: Your determination to stay out of debt is admirable, but prepaid cards are problematic. You don’t have the same federally mandated consumer protections you have with a debit or a credit card, so merchant disputes or a lost or stolen card can wind up costing you big time.

Furthermore, these cards can be expensive. You often pay to activate the card, to load it with cash and to access the cash in transactions. Card comparison site NerdWallet.com studied 40 popular prepaid debit cards and found that the average card cost nearly $300 annually in basic fees. Monthly fees of up to $14.95 took the biggest toll, but $1 to $2 fees per transaction and for ATM use could easily cost a typical user more than $20 a month.

If you’re convinced prepaid cards are the best money-management tool for your situation, though, you might want to choose the American Express Bluebird, which was dramatically less expensive than its competitors in the NerdWallet study. The Amex card charges no monthly or per-transaction fees and allows for direct deposit. ATM withdrawals cost $2 apiece and cash reloads are just a buck, compared with an average of $4.50 with other cards.

Eventually you may want to look into getting a secured credit card to help you rebuild your credit scores, since prepaid cards won’t help with that. A secured card is one in which you make a deposit at the issuing bank, usually between $200 and $1,000, and get a card with credit limit equal to your deposit. You don’t need to carry a balance on these cards, but you do need to have and use credit if you want to rehabilitate your battered credit. NerdWallet recommends the secured cards issued by Orchard Bank and Capital One.